The Motley Fool Previous Page

Met Coal Mania Mounts

Christopher Barker
April 14, 2010

As spring fever spreads like wildflowers across the northern hemisphere, the fever down under is a different kind of affliction altogether.

Met coal mania has spread quickly from the core of demand emanating from China and India, to the most coveted supplies trapped inside of Australia's richest ores.

This strengthening, global secular bull market for coal has triggered an outbreak of consolidation and fast-tracked development initiatives that continue to drive what I consider some of the most compelling investment opportunities of the decade.

While momentum has recently returned in dramatic fashion, I see the roots of this bull market cycle in the pre-crisis run-up that saw the Market Vectors Coal ETF (NYSE: KOL  ) surge above $60 per share before a panic-driven correction caught hold. Along with the ETF's constituent stocks -- led by CONSOL Energy (NYSE: CNX  ) -- coal shares have yet to recapture those pre-crisis heights.

Despite the depth of the ensuing correction, the long-term indicators for sustained coal demand never faltered, and even near the height of the panic I argued that Chinese demand would spark a health